Australian house prices have recorded their steepest quarterly decline on record, with property values falling across all eight capital-city markets during the September quarter of 2026. New figures released by property research platform Domain show combined capital-city house prices dropped by 4.7 per cent, reducing the median price by approximately $59,870 to $1,226,566.

The decline marks the first time in 15 years that house prices have fallen across every Australian capital city in the same quarter. It is also only the second time such a widespread decline has been recorded. The figures indicate that the slowdown has expanded beyond individual markets and is now affecting cities that previously experienced strong price growth.

Perth recorded the largest fall, with house prices dropping 7.4 per cent, or approximately $88,664, to $1,115,227. The result represents the city's steepest quarterly decline on record. Brisbane followed with a 5.4 per cent fall to around $1.15 million, ending nearly four years of uninterrupted growth. Adelaide house prices declined by 3 per cent to approximately $1.095 million, matching its steepest quarterly decline recorded in 2009.

Sydney and Melbourne also experienced substantial reductions. Sydney house prices fell 4.7 per cent to approximately $1.66 million, marking the city's largest quarterly decline in four years. Prices have now fallen for three consecutive quarters and sit around 7.9 per cent below their December 2025 peak. Melbourne recorded a 3.3 per cent decline to approximately $1.014 million, bringing its median house price closer to the $1 million mark after several years of growth.

Other capitals experienced smaller but significant declines. House prices fell 2.6 per cent in Canberra and Darwin, while Hobart recorded a 3 per cent reduction. Darwin remained an exception in the unit market, where prices increased by 2.2 per cent during the quarter. Across the combined capital cities, unit prices fell 3.5 per cent to approximately $702,858, their steepest quarterly decline in seven and a half years.

Economists attribute the downturn to a combination of higher interest rates, persistent cost-of-living pressures, reduced borrowing capacity and weaker buyer confidence. Higher mortgage repayments have made it harder for households to afford properties, while uncertainty about future prices has encouraged some potential buyers to delay purchases. Investors have also become more cautious amid higher financing costs and changes to housing investment tax policy.

The impact has been uneven across different price brackets. More expensive properties have generally experienced larger declines, while lower-priced homes have remained comparatively stable in several markets. Analysts say higher borrowing costs have reduced the pool of buyers able to purchase expensive properties, while demand for more affordable homes has been relatively resilient.

The market slowdown is also changing the balance between buyers and sellers. Homes are taking longer to sell, auction activity has weakened, and some sellers are adjusting asking prices or moving away from auction campaigns. Buyers with secure finances may have greater opportunities to negotiate than they did during the recent period of strong price growth.

However, falling prices do not automatically make housing affordable for everyone. High property values, living expenses and mortgage costs continue to place pressure on households, particularly first-home buyers. The outlook will depend on borrowing conditions, household confidence and broader economic developments.

The September-quarter figures suggest Australia's housing market has entered a broader correction, rather than a slowdown limited to a few cities. Further movements will depend on how interest rates, affordability and buyer demand evolve in the coming months.